Last week Oxfam released a report, “Powering up against poverty: why renewable energy is the future”, which argued that advances in renewable energy mean there is “no trade-off between improving lives and tackling climate change”.
Comforting as this message is, it is also fundamentally inaccurate. Given existing technologies, expanding access to electricity almost always increases CO2 emissions. There are real trade-offs between addressing poverty and climate change.
The report’s primary purpose is to debunk claims that “coal is good for humanity”. Poor communities are generally the most vulnerable to climate impacts, so Oxfam has good reason to oppose disingenuous efforts to link coal with poverty reduction.
However, since western NGOs, governments and banks have enormous influence over what projects are funded in the developing world, misleading analysis can be disempowering.
Ideally, a development NGO should provide evidence-based analysis that assists affected communities to make their own decisions.
Is solar power best?
If a rural household or community living far from a central grid wants a very modest supply of electricity, then solar micro-grids are now the cheapest option.
However, low-cost solar systems are only sufficient to power a few lamps or small devices for a few hours a day. And while an electric lamp is better than nothing, if given the chance most people would also use electricity for refrigeration, cooking, washing and computing. Reliable power also makes a variety of businesses and light industries possible.
The lure of more reliable, higher-capacity supply means communities almost always opt for a centralised grid connection as soon as it becomes affordable (in some cases NGO-provided micro-grids have been abandoned). It’s at this level of access – where electricity consumption is typically still only a fraction of what the rich world takes for granted – where addressing energy poverty conflicts with climate goals.
Developing world still looks to fossil fuels
The Center for Global Development recently crunched the data for President Obama’s “Power Africa” initiative, and found that if the US Overseas Private Investment Corporation were allowed to invest in natural gas projects (not just renewables) it could roughly triple the number of people who gained electricity access from a US$10 billion investment. Whereas a renewables-only portfolio could supply 30 million people, natural gas could reach 90 million and generate around ten times as much electricity.
Oxfam emphasises the rapid growth of renewable energy in developing countries. This is partly because, since 2013, the World Bank and other funders have stopped supporting developing-world coal projects.
While there may be plausable justifications for these policies, honesty requires that we call them what they are: forms of “carbon conditionality” through which western priorities are imposed on the global poor.
Developing states commonly reject this conditionality. For example, one Indian official has confirmed New Delhi’s hope that the new Chinese-backed Asian Infrastructure Investment Bank will support coal projects.
India is seeking, in the name of development and poverty reduction, to double domestic coal production in the next five years and to rapidly expand coal-fired generation.
It will be a tragedy if India’s development imperils the global climate. However, India’s plans illustrate the catch-22 facing the developing world. Climate change threatens impoverished people, but escaping poverty is near impossible without fossil fuels.
The conflicts in climate policy
Oxfam would have us believe that the falling price of renewables has consigned this dilemma to history, as “renewable energy is a cheaper, quicker and healthier way to increase energy access”. Wind (and soon solar) are indeed becoming cost competitive at low levels of grid penetration and will play an increasing role in generation.
However, the more electricity is sourced from intermittent sources, the trickier it becomes to integrate into a stable grid. This is why non-intermittent sources such as coal, nuclear, hydroelectricity and gas still dominate electricity supply internationally.
No doubt technological progress will slowly increase renewables’ feasible market share. However, in the coming decades wind and solar alone will only be sufficient for people whose electricity use is a small fraction of the OECD average.
Oxfam enthuses over the possibility that by 2030 half a billion people could have 200 watts of solar PV capacity (p.15), but this estimate is taken from an International Energy Agency roadmap that only promotes solar PV for those remote communities that are unable to gain grid access. While Oxfam terms this “leapfrogging” of old technologies, it implies that the poor world’s energy options will remain limited for a long time to come.
At times the Oxfam report is misleading. For example, it suggests that “solar could soon be the world’s largest source of electricity” (p. 26). The truth is that solar now supplies about 1% of global electricity. How soon might this change? The International Energy Agency report cited outlines a roadmap by which solar technologies could potentially supply 27% of global electricity in 2050.
Oxfam also claims that coal is “losing the race to renewables”. Unfortunately, coal’s share of global energy (30%) is just shy of its 40-year high (30.1%), there is now more coal infrastructure than ever before, and coal use is expanding rapidly across our region (even Germany has been constructing new coal and lignite capacity).
There are good strategic reasons for advocates to put a positive spin on the progress of renewable energy. Projecting an image of success may build public support and Australians have excellent reasons to deploy more low-carbon capacity at home. However, is imposing specific energy technologies on the developing world equally justified?
Oxfam recognises that many developing states will continue to utilise all energy options and it carefully stops short of endorsing “carbon conditionality”. However, in repeatedly claiming that renewables are the developing world’s best energy option, and emphasising the need for Australia to support developing countries’ renewable energy plans, Oxfam appears to seek to shape developing world energy choices.
Climate policy contains some difficult social dilemmas. Do we prioritise energy access over mitigation? Is there a role for advanced nuclear technologies? How can we accelerate the rate of technological innovation so that we have a more attractive set of options in the future?
Pretending that these dilemmas don’t exist might be smart politics; but it is not a pro-poor approach to development.